Media Critics Are Missing the Point: Social Equity Marijuana Licenses in Arizona and Other States Provided A Path To Prosperity

Media criticism of social equity marijuana licenses tends to rely on isolated problems while ignoring success stories. The former are much easier to find. The latter have no need to reach out to the nearest newsroom or are drown out by politicians, reporters, and industry players with an agenda and a soap box.

First a little background. Arizona, and a number of other states, had the best of intentions when they introduced ‘social equity’ components in determining how recreational marijuana dispensary licenses or permits were to be granted in the 2020 package that was approved by statewide votes 60% to 40%. Arizona prioritized people of color as well as communities and individuals who were disproportionately impacted by marijuana laws that seemed to target minorities for incarceration. Other states have similar rules to right past wrongs. But in offering these financial opportunities, many states offer little if any assistance to help these groups navigate the complicated and byzantine rules to secure a dispensary license. Unless you can afford expensive expert attorneys, the process is daunting, cost-prohibitive, and almost insurmountable.

Rather than spending substantial sums in a lottery-based system where results were far from guaranteed or forgoing the opportunity entirely due to the associated costs, some social equity applicants choose to partner with investors. Under this arrangement, both sides stood to benefit financially, while the applicant avoided essentially all of the financial risks and usually maintained a majority interest in the applying entity.

For the fortunate few, thousands of applicants in Arizona (only 26 licenses were awarded), the next step of finding a location for a dispensary and obtaining the needed zoning was another mountain to climb.  Without a business partner, the applicant would have to obtain substantial financing and hire specialized zoning attorneys with high hourly rates to have any possibility for success, effectively creating an “all in” scenario for individuals with no industry experience or know-how.  For those with the limited financial means that qualifies the person to hold a majority interest in applying entities, that kind of financial risk made little or no sense—particularly given alternative options presenting certain, immediate, life-changing opportunities.

Arelise Hollinquest is a Phoenix area healthcare professional. Hollinquest, an African American with a family member who previously fell victim to the state’s harsh marijuana laws, is poised to dramatically change her life and the lives of her extended family thanks to the social equity dispensary program. After business partner Mike Halow helped her make hundred of thousands of dollars of profit from obtaining an Arizona recreational dispensary permit, Hollinquest is now setting her sights on opening a dispensary in New York City. Halow also helped her get a license there in addition to helping her find a location with the right zoning. Halow has more than 15 years’ experience in both medical and recreational marijuana dispensaries. He operates or is involved in the operation of dispensaries all over Arizona and three other states, employing scores of people. He is also a real estate investor.

“When I first tried to do this on my own, I was very frustrated because they make the application process so confusing. It always helps to have someone that can actually give you the answers,” said Hollinquest. Her next step is finding a location for the dispensary. She hopes once the business is established it can not only provide a source of income for her family now, but generational wealth for her children in the years to come.

Nicholas Holmes was visiting his grandmother in Louisiana following the death of his father. He spotted a postcard addressed to his late father with an invitation to pursue a marijuana dispensary license. He later contacted Halow as well. Holmes now has a license for a dispensary in Illinois.  Holmes, an African American whose life was impacted by past unjust marijuana laws said, “It feels good to have my name attached to something like a dispensary, once having that experience it’s kind of like a 180-degree moment.” His father passed before he could complete repairs on his mother’s roof. Halow is helping Nick pay contractors to finish the job.

Halow said the vast majority of people he works with are like Nicholas and Arelise, “I’m not just investing in businesses and dispensaries, I am investing in hardworking people who deserve a path to prosperity.”

While media reports tend to focus on rare instances where partnerships went wrong, it’s easy to lose sight of the success stories.   At a minimum, nearly early all individuals that qualified to hold a majority interest in entities that were awarded a social equity marijuana license have been paid substantial sums they would never have otherwise realized.  If Arizona and other states curtail social equity marijuana licenses, it would be a windfall for attorneys who specialize in marijuana law and zoning, and a great loss for would be social equity dispensary applicants who can’t afford needed expertise to get out of the weeds.

Any new program has its challenges. But Halow, Hollinquest, and Homles are demonstrating there is a path to success, contrary to much of the current narratives about social equity licenses.